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Update No: 093 - (28/01/11)

Not for the first time, the bitterly cold Korean winter – even Seoul has recently experienced two especially chilly snaps, and the North of course gets the worst of it – seemed also an apt metaphor for politics on the peninsula. The DPRK system, and especially its rhetoric, often appear to be frozen in time; while inter-Korean relations remained mostly icy in the wake of the North’s shelling of the South’s Yeonpyeong island on November 23.

Yet January also brought hope. Several separate if so far small signs seem to suggest, first, that Pyongyang plans at last to start doing something serious about fixing its long-neglected and largely broken economy. Second, and separately, as the month ends it looks as if the two Koreas have found a way to talk to each other again, malgré tout. The South has accepted a Northern offer of military talks, which are expected in February; no date has yet been set.

Taking the economy in hand
One of North Korea’s many peculiarities is how utterly it ignores the modern adage: “It’s the economy, stupid.” Instead Pyongyang puts ideology and politics in command, to a pitch that one can only call ideolatry. Official discourse suggests that if (and only if) ideology is sound, all will be well. Kim Il-sung’s slogan might as well have been: “It’s the ideology, stupid.”

Where the economy does get a slight look-in is in the joint New Year editorial of three major newspapers – the Party, Army and youth dailies – setting out tasks for the year ahead. This time it bore the ungainly headline: “Bring about a Decisive Turn in the Improvement of the People's Standard of Living and the Building of a Great, Prosperous and Powerful Country by Accelerating the Development of Light Industry Once Again This Year.” (Last year’s was similar, except agriculture had equal billing with light industry.) Those with the patience to do so may peruse the full text on the website of the DPRK’s official Korean Central News Agency (KCNA) at

As ever, this was full of stale militarist rhetoric – “Light industry is the main frontline for this year's all-out battle” – with nary a word on concrete measures, much less reforms, which might achieve this. Ominous too were a renewed stress on economic self-reliance (Juche), plus no mention at all (unlike last year) of foreign trade or investment.

A new ten year plan
So far so bad, and drearily familiar. Yet a fortnight later came something new. On January 15 KCNA reported that the Cabinet has adopted a 10-Year State Strategy Plan for Economic Development, and will set up a State General Bureau for Economic Development (SGBED) to implement it. The goals were vague, to say the least, and again well-worn. The new plan will put the “main emphasis on building infrastructure and developing agriculture and basic industries including electric power, coal, oil and metal industries and regional development.”

In an unfortunate metaphor, this will build on the “solid springboard (sic) laid for building a thriving socialist nation under the outstanding and tested Songun leadership of Kim Jong-il.” Moreover: “When the above-said strategy plan is fulfilled, the DPRK will emerge not only a full-fledged thriving nation but take a strategic position in Northeast Asia and international economic relations.” And when might that be? The new plan “helps lay a foundation for the country to emerge a thriving nation in 2012 and opens a bright prospect for the country to proudly rank itself among the advanced countries in 2020.”

2020 vision
The dates are significant. For several years the DPRK has claimed that it will create a “great and prosperous nation” (kangsong taeguk) by 2012, the centenary of Kim Il-sung’s birth. That is plainly impossible, and as such is a hostage to fortune. The new ten year plan, despite a ritual nod to 2012, thus in effect kicks the can further down the road and buys more time.

Interestingly, there is an external dimension. The Cabinet has “entrusted the Korea Taepung International Investment Group with the task to fully implement major projects under the strategic plan.” KTIIG was established about a year ago, as a joint venture involving one Pak Chol-su, described by KCNA as “a Korean resident in China.” Both KTIIG and Pak are also involved in the State Development Bank (SDB) whose founding KCNA reported last March – but of which nothing has been heard since. Oddly, the SDB appeared to come under the National Defence Commission (NDC), which as the DPRK’s top executive body outranks the cabinet but whose remit is supposed to be security, not economics.

As ever we shall have to wait and see. Annually announcing shadowy new bodies, with no further detail or follow-up, doth not an economic reform make. So it may be a tad premature for Korea Business Consultants (KBC), who specialise in liaison with the North, to send out a “Newsflash” on November 25 citing this as one of two recent developments “which may point to a potentially dramatic opening up of the DPRK …economy in the coming year.” But we live in hope.

Action in Rason, at last?
The second cause of KBC’s excitement is also interesting. The Seoul daily JoongAng Ilbo is quoted as reporting that a Chinese state-owned firm, Shangdi Guanqun Investment, plans to invest some US$2 billion in Rason: the northeasternmost district of North Korea, bordering China and Russia. Formerly Rajin-Sonbong, this was declared a Free Economic and Trade Zone as long ago as 1991. The word ‘free’ was soon dropped, but the hoped-for bonanza did not materialise since Pyongyang did little either to deregulate or to create infrastructure. The sole major investor was Hong Kong’s Emperor Group, which built a casino-hotel to attract Chinese gamblers from across the border. This was closed for several years after Beijing cracked down on such tourism, but has reportedly reopened. A British journalist who visited Rason in September, Michael Rank, found it bleak, remote and desolate; see his report at

Yet Rajin, a year-round ice-free port, clearly has potential for China’s Jilin province which lacks its own coastline. Earlier reports suggest that both Russia and China are modernising some harbour facilities in Rason, but what Shangdi Guanqun plans is of a vastly greater order of magnitude. Here again there have been other rumours of big Chinese investment plans for North Korea, none of which have yet been confirmed. This latest one, also carried by the Wall Street Journal, sounds less shadowy than most. Again, we must wait and see.

The two Koreas may talk
Moving from business to politics, and from North Korea’s somewhat porous border with China to the distinctly tense (and ironically named) Demilitarised Zone (DMZ) with South Korea, the good news is that the two Koreas may be about to resume dialogue for the first time since the North shelled the South’s Yeonpyeong island on November 23. That marks a change from late December, when Pyongyang issued dire threats of retaliation if the South went ahead with war games around Yeonpyeong. Seoul was undeterred, and in the event the North held its fire. On December 20 the Supreme Command of the Korean People’s Army (KPA) explained that it “did not feel any need to retaliate against every despicable military provocation”, but warned that “the second and third powerful retaliatory strike to be made by the revolutionary armed forces of the DPRK knowing no limit as declared before the world will lead to blowing up the bases of the US and south Korean puppet warmongers.”

Both sides made noises about peace as the year turned, but in ways that hardly suggested they were serious. The North’s aforementioned Joint Editorial contained some encouraging sentiments: “Confrontation between north and south should be defused as early as possible … Dialogue and cooperation should be promoted proactively. Active efforts should be made to create an atmosphere of dialogue and cooperation between north and south by placing the common interests of the nation above anything else. Free travel of and exchanges between people from all walks of life should be ensured and cooperation projects encouraged, to contribute to improving inter-Korean relations and to achieving reunification.”

Yet the adjacent paragraphs exhibited a tone and content sharply at odds with this: “Last year the south Korean conservative authorities revealed their true colours as the minion of war and anti-reunification, confrontation maniac. In collaboration with the outside forces they incessantly hatched anti-DPRK plots and perpetrated north-targeted war moves … The entire nation should never tolerate the criminal moves of pro-US war hawks who stake their fate on foreign forces and drive the situation to the brink of war in collusion with them.”

Wanting peace, setting conditions
Seoul showed a similar inconsistency, if in less colourful language. In his New Year address on January 3, South Korea’s President Lee Myung-bak said: “I remind the North that the path toward peace is yet open. The door for dialogue is still open.” Yet he at once added a condition: “Nuclear weapons and military adventurism must be discarded.”

Opposing adventurism is unexceptionable. South Korea has every right to insist on no more attacks by the aggression against it. But denuclearisation? That is the end-point of a very long road, wearily trodden for 20 years. To make it a precondition for talks is quite unrealistic. Yet this has been Lee’s constant refrain ever since he took office in 2008.

More recently, Seoul’s stance is that it will not talk to Pyongyang unless the latter apologises for both the Yeonpyeong shelling and the earlier sinking last March 26 of its corvette the Cheonan, when 46 died. (The North has always angrily denied torpedoing the Cheonan; it admits the shelling, but claims to have been provoked by the South’s firing first.)

The sub-text: regime change
Lee continued: “From now on, we need … peace and reunification policies based on solid national security … [and to] make endeavours to engage our North Korean brethren in the long journey toward freedom and prosperity.” Whom is he addressing here? Surely these “brethren” are not the DPRK government but the North Korean people. This suggests that Lee has given up on Kim Jong-il, and in effect is awaiting – or fomenting? – regime change.

Similarly, as we noted in last month’s Update, on December 9 Lee was in messianic mode. Saying “I feel that reunification is drawing near”, he added that Seoul has a responsibility to achieve reunification as soon as possible, so that 23 million North Korean people may live with the right to happiness. This message will not be lost on Pyongyang, but one wonders what Seoul seeks to achieve with such talk. If the Kim regime reads this as confirming that Lee Myung-bak wants them gone, and has no serious will to engage them on any terms they could accept, they may conclude that they have little to lose from continuing to harry him. Having given Lee two nasty bites last year and got away with it, why not do it again?

Yet as so often, the North abruptly changed tack. On January 5 a joint meeting of the DPRK government, political parties and organisations – these were not further specified – declared that “We are ready to meet anyone, anytime, and anywhere … We propose discontinuing to heap slanders and calumnies on each other and refraining from any act of provoking each other… We courteously propose having wide-ranging dialogue and negotiations with the political parties and organisations of south Korea, including its authorities.”

Talk to us properly
Sweet words, but Seoul smelt a rat. Putting matters thus posits the ROK government as just one interlocutor among many: a long-standing trope in the North’s tactics to delegitimise South Korea. Even though a few sentences later the North called for “an unconditional and early opening of talks between the authorities having real power and responsibility, in particular,” one can understand the South’s tepid response. Vice Unification Minister Um Jong-sik commented: “In both format and content, I believe it is difficult to see [the DPRK statement] as a formal proposal for talks.” He called instead for a “respectful attitude … For dialogue to take place, it must be guaranteed that it can be constructive and beneficial.”

‘Guaranteed’ is asking a lot. But it is right to demand that the North stop playing games and approach the South properly, government to government. This it finally did on January 20. In a telegram to the recently appointed ROK defence minister, Kim Kwan-jin, his DPRK counterpart Kim Yong-chun proposed military talks to exchange views on both the Cheonan and Yeonpyeong incidents, and discuss reducing tensions on the peninsula more generally.

By then Seoul was at risk of appearing the obstinate one if it kept turning down Pyongyang’s overtures. This one finally passed muster; the South accepted with rare alacrity on the same day. As of late January no date had been fixed, but initial working-level talks are expected in February. If these go well (a big if), higher-level dialogue may follow. What such a meeting may accomplish, absent shifts in position by one side and/or the other, remains to be seen. But at least face-to-face contact may enable each to suss out better where the other stands, and what are their true motives and goals. And though the quotation grows stale from over-use, Winston Churchill remains right: jaw-jaw is better than war-war.

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